The City and 'that' Budget

As one brewer suggested to me last week, there is a long line of people wanting to give Alistair Darling "a hefty kick in the privates" following his recent Budget.

Perhaps the most put-out - but doubtless one who would refrain from any act of physical violence - was Jonathan Neame, chief executive of Kent brewer Shepherd Neame.

For months he fronted the industry's duty campaign, concluding that Treasury officials had understood the industry's plight. The Chancellor's statement suggests such overtures were completely ignored.

As he writes in the Publican's City pages this week, Neame feels betrayed by ministers who chose not to understand the issues.

Ironically, anecdotal data suggests the Chancellor will actually raise some £50m less than his forecast of £400m from the duty increase. And as for the four year-long 'accelerator', well, how justifiable is that?

Neame's sentiments are echoed by Charles Wells' Paul Wells, who points to the growing gulf between Westminster and the country.

More sobering was the reaction of the City. Yes, shares in pubcos and brewers fell in the wake of the Budget. But it wasn't the driving force here; actually the City wasn't all that surprised at the duty rises.

No, shares across the board took a very deep bath over banks collapsing around our ears and the likely knock-on effects thereof.

Consecutive years of record profits growth could well come to a grinding halt in this financial year for many big-name pub operators. But here, too, the City has already discounted this. It is looking further ahead.

Meanwhile, there's little prospect of significant corporate activity across the sector - with the possible exception of Mitchells & Butlers - for the simple reason that no-one's got any money to buy anything with.